Young-Davidson Fully Funded and Advancing on
Schedule and on Budget
Notice: Conference Call and Webcast of Q3
Results Today at 10:00 am ET
Dial in: +647-427-7450 or 1-888-231-8191
VANCOUVER, Nov. 10 /PRNewswire-FirstCall/ - (All figures in US
dollars except where noted) - Northgate Minerals Corporation
("Northgate" or the "Corporation") (TSX: NGX; NYSE Amex: NXG) today
announced its financial and operating results for the three and
nine months ended September 30, 2010.
Third Quarter Highlights
- Reported adjusted net earnings of $1.7 million or $0.01 per
diluted share.
- Generated cash flow from operations of $13.5 million or $0.05
per diluted share.
- Adjusted net earnings and cash flow from operations were
adversely impacted by an inventory build-up at Kemess South as poor
railcar availability impeded metal sales during the quarter. As
inventory is sold during the fourth quarter of 2010, we expect to
realize an additional $14 million in revenue.
- Produced 64,999 ounces of gold and 10.9 million pounds of
copper at an average net cash cost of $645 per ounce.
- Successfully completed a convertible note offering for net
proceeds of $163.5 million to fund the development of the
Young-Davidson mine; Young-Davidson is now fully-funded and
construction is advancing on schedule and on budget.
- Successful exploration results at Northgate's operations:
-
- Kemess Underground: intersected the highest
grade-thickness interval ever encountered on the property of 3.37
grams per tonne ("g/t") gold and 0.95% copper over 60 metres
("m").
- Stawell: discovered gold in two previously untested
areas, the first being the previously reported Northgate Gift and a
second area 1.6 kilometres ("km") south of existing mine
workings, which intersected 13.7 g/t gold over 5.45 m,
including 25.0 g/t gold over 2.2 m, and 15.4 g/t gold over 2.5
m.
- In addition to exploration results released during the quarter,
we are pleased to announce further exploration results, which are
reported in Northgate's exploration press release dated November
10, 2010. Highlights include:
-
- Stawell: drilling within Golden Gift 6 Lower ("GG6L")
intersected high-grade mineralization: hole MD-5281 returned
several excellent intervals: 4.9 g/t over 16.4 m, including 7.1 g/t
over 7.6 m and 15.9 g/t over 5.1 m in the basalt contact zone
and 24.0 g/t over 10.6 m in the waterloo.
- Fosterville: drilling within the lower Phoenix resource
block continues to show promising results in the Phoenix Footwall
and Phoenix Extension, indicating the potential to add new reserves
and extend the zone another 150 m south along strike and down
plunge.
"Third quarter production was highlighted by
strong results from Kemess South, which exceeded our production
guidance. Also, our Stawell operation showed improvement during the
quarter and we look forward to returning to historical levels in
the fourth quarter and beyond" commented Ken Stowe, President and
CEO. "Complementing Stawell's improving operational performance was
an exciting discovery of high grade gold mineralization in a
previously untested area that is readily accessible from existing
mine workings. Combined with the recently announced Northgate Gift
discovery and the excellent assays within GG6L, we expect these
results to have a positive impact on the future of the operation.
Exploration efforts at Fosterville have also started to pay
dividends with promising results within the lower Phoenix resource
block, where we have intersected high-grade areas of
mineralization. Other exploration highlights during the quarter
included returning one of the best intercepts in the resource
database at Kemess. The initial eleven holes that were released
have exceeded previous resource block estimates in the block cave
zone by an average of 22% for gold and 20% for copper.
"With the successful completion of a $170
million convertible note offering, we are now fully funded to build
the Young-Davidson mine, which will be entering the commissioning
phase in a little over a year from now. We are pleased to have
completed the financing of Young-Davidson through one of the least
dilutive means possible. For the balance of 2010 and beyond,
we look forward to ramping up construction activities at
Young-Davidson and following up on exploration results from
near-mine exploration programs at all of our operations."
Financial Performance
Northgate recorded consolidated revenue of $88.3
million in the third quarter of 2010, compared with revenue of
$120.2 million recorded in the same period last year.
For the nine months ended September 30, 2010, Northgate recorded
revenue of $336.3 million, lower than the $374.3 million recorded
in the corresponding period of 2009.
Adjusted net earnings for the third quarter of
2010 were $1.7 million or $0.01 per share, compared with adjusted
net earnings of $7.7 million or $0.03 per share in the third
quarter of 2009. The net loss for the third quarter of 2010 was
$8.9 million, which included an unrealized loss of
$14.8 million relating to the change in fair value of
Northgate's copper forward sales contracts. These contracts
are priced at Cdn$3.31 per pound and were put in place in order to
secure a significant portion of cash inflow over Kemess South's
remaining mine-life.
Northgate continued to generate positive cash
flow from operations of $13.5 million or $0.05 per share in
the most recent quarter and continues to maintain a strong balance
sheet, with cash and cash equivalents totalling $168.2 million
as of September 30, 2010.
On September 29, 2010, Northgate announced the
launch of a $135 million public offering of convertible notes and,
due to strong investor demand, increased the size of the offering
to $150 million. Following the exercise by the underwriters of the
$20 million over-allotment option, which was announced in October,
Northgate received net proceeds of $163.5 million. Northgate is now
fully funded to build the Young-Davidson mine, which is scheduled
for production in 2012, and fully expects the mine to generate more
than sufficient cash flow to repay the convertible notes when they
mature in 2016.
Results from Operations
Fosterville Gold Mine
Fosterville achieved production of 22,436 ounces
of gold in the third quarter of 2010, which was slightly lower than
forecast. A re-design of ore reserves of several mining
levels in the Phoenix and Ellesmere zones resulted in decreased
mining rates during the quarter, which resulted in lower
production. For the third quarter of 2010, mine generated
cash flow from operations of $8.9 million.
During the quarter, a total of 166,912 tonnes of
ore were mined and mine development advanced 2,144 m, compared
with 201,130 tonnes mined and 2,362 m advanced, respectively,
in the corresponding period of 2009.
Also during the quarter, 206,185 tonnes of ore
were milled at a grade of 4.08 g/t, compared with the 201,866
tonnes milled at a grade of 4.51 g/t in the corresponding quarter
of 2009.
The average net cash cost of production for the
third quarter of 2010 was $774 per ounce, which was higher
than forecast of $721 per ounce and the cash cost of $612 recorded
in the same period last year. The net cash cost was adversely
effected by the dramatic increase in the Australian dollar relative
to the US dollar, which averaged 9% higher in the most recent
quarter compared to the corresponding period last year.
Stawell Gold Mine
The Stawell operation showed improvement during
the third quarter; the mine produced 16,530 ounces, which was an
11% improvement over the 14,832 ounces produced in the previous
quarter. Production was hindered somewhat by ventilation
restrictions and several stopes not blasting to design. However,
both issues have since been rectified and as development in the new
GG6 mining zone has begun, with significantly higher average
reserve grade of 6.3 g/t, the mine is on track to returning to
historical levels in the fourth quarter and beyond.
During the third quarter of 2010, a total of
191,087 tonnes of ore were mined and mine development advanced
1,488 m. The average net cash cost of production for the third
quarter was $939 per ounce, which was 12% lower than the $1,069 per
ounce recorded in the previous quarter. Cash costs in the
most recent quarter were affected by the dramatic increase in the
Australian dollar relative to the US dollar.
Kemess South
During the third quarter, Kemess South posted
gold production of 26,033 ounces, which was higher than
forecast. Copper production of 10.9 million pounds was
slightly lower than forecast due to lower than planned mill
throughput. The net cash cost of production for the third quarter
of 2010 was over $100 lower than forecast at $347 per ounce,
primarily as a result of strong copper prices. For the fourth
quarter of 2010, the net cash cost is expected to drop dramatically
to less than $0 per ounce, again as a result of strong copper
prices.
During the quarter, approximately 9.4 million
tonnes of ore and waste were removed from the eastern end of the
open pit, representing an increase from the 8.3 million tonnes
removed during the corresponding quarter of 2009. Unit mining
costs remain low at Cdn$1.21 per tonne moved, as ore and waste haul
distances are shorter out of the eastern end of the open pit.
The mill continues to achieve excellent results.
Mill throughput and mill availability during the third quarter of
2010 were 52,266 tonnes per day ("tpd") and 92%, respectively,
which was higher than the 50,328 tpd and 90% achieved in the same
period of 2009.
2010 Production Forecast
Northgate's production forecast for the balance
of 2010 is outlined in the following table. Production in the
fourth quarter of 2010 is forecasting 67,500 ounces at Northgate's
three operating mines at an average net cash cost of $570 per
ounce.
|
|
|
|
|
|
Actual
(ounces) |
Forecast (ounces) |
Total
(ounces) |
Forecast
2010
Cash Cost ($/oz)1 |
|
Q1 |
Q2 |
Q3 |
Q4 |
Fosterville |
26,421 |
28,476 |
22,436 |
21,000 |
98,500 |
$750 |
Stawell |
22,238 |
14,832 |
16,530 |
21,000 |
74,500 |
$915 |
Kemess |
24,703 |
24,967 |
26,033 |
25,500 |
101,000 |
$335 |
|
73,362 |
68,275 |
64,999 |
67,500 |
274,000 |
$640 |
1 Assuming copper price of $3.75/lb and
exchange rates of US$/Cdn$0.98 and US$/A$0.98 for Q4 2010.
Young-Davidson Advancing on Schedule and on Budget
Since receiving notice in July from the Ontario
Ministry of Northern Development, Mines and Forestry ("MNDMF") of
acceptance of the Closure Plan for the Young-Davidson mine,
Northgate mobilized the appropriate resources and immediately began
surface construction activities on site. Several projects
have advanced since Northgate broke ground on the property in
August, including:
- Construction of the new hoist house for the existing shaft,
which is scheduled for completion by the end of the year.
- Site clearing with heavy mobile equipment; much of the site has
been cleared for the process plant area.
- Construction of the main plant site and tailings impoundment
areas commenced in August and will continue through next year.
- Construction for the realignment of Highway 566.
- Awarded the contract for construction of the process plant
building with construction scheduled to start in November.
- Procurement of new ventilation equipment to service the
increased underground mine development activities.
Development activities underground also ramped
up during the quarter to an average development rate of 11.6 m per
day. The ramp was extended 319 m to a total length of 3,605 m
and an additional 840 m of lateral development was achieved.
Completion of additional ventilation infrastructure to support
underground development activities was also completed during the
quarter.
Development activities over the next six months
will include:
- Continuing major earthworks required for the preparation of the
project site.
- Commissioning the new hoist and commencing sinking operations
of the existing shaft.
- Raise boring work for the first leg of a new 5.5 m diameter
Northgate production shaft.
- Completing the erection of the process plant building.
- Preparing the materials required for the construction of the
tailings dam.
- Installing major process equipment.
- Awarding the electrical/mechanical installation contract.
- Starting the open pit pre-production development.
In September, the 30% engineering control budget
for Young-Davidson was completed. With 60% of the contracts
awarded (approximately $145 million), 35% of the equipment purchase
orders placed (by value) and 35% of the engineering complete, the
new budget has confirmed the project capital cost estimates. As
such, to date Northgate has not needed to rely on the allowance for
contingencies, which it has established for project budgeting
purposes. Young-Davidson is scheduled for commissioning activities
in the fourth quarter of 2011 and is targeting start-up of
production in late Q1 2012. The mine is expected to generate
an average of 180,000 ounces of gold annually over an initial
15-year mine life.
Exploration Overview
Young-Davidson
Exploration at Young-Davidson in the third
quarter was part of a 20,000 m drill program to explore for
other deposits outside of the known reserves and resources
currently being developed. Two drills operated during the quarter
with targets focusing on the area up dip from hole 198 (see press
release dated July 6, 2010) located west of the Young-Davidson
orebody, which intersected 3.46 g/t gold over 79.5 m
(estimated true thickness is 53.5 m). To date, eight holes
have been completed in the area and two more are in progress. The
initial follow-up holes have been unsuccessful as two near-surface
holes were east of the fault and did not intersect the zone. In
addition, two of the deeper holes did not reach the target zone and
two visually promising holes, which intersected syenite
mineralization, returned only low grade gold intervals (holes 226A
and 232). Results are still pending for a further two holes, which
are currently targeting in closer proximity to hole 198 and two
diamond drills continue to work in this area. The geology in this
area is proving to be more complicated than the main Young-Davidson
deposit and additional holes will be required to resolve the
geometry of the mineralization in this area. Two drills will
continue to drill additional holes in the YD West area as it still
represents an excellent opportunity to substantially add to the 2.8
million ounces of reserves that already exist on the
property.
Figure 1: Young-Davidson Longitudinal Section
www.northgateminerals.com/Theme/Northgate/files/Releases/Q310Fig1.gif
Resource modeling of the near surface mineralization immediately
east of the proposed open pit has now been completed and has
outlined an indicated resource of 572,000 tonnes at 1.86 g/t gold
containing approximately 34,000 ounces of gold. This resource
is now being evaluated from a pit optimization perspective to
assess the potential for conversion of the new resource into
reserves in Northgate's 2010 year-end reserve statement.
Kemess Underground
The Kemess Underground diamond drill program was
initiated in order to more tightly define the 70+ million tonne
higher grade core of the Kemess North deposit within which previous
drilling had defined in excess of 1.4 million ounces of gold and
500 million pounds of copper. This program will also determine
the geotechnical characteristics of the higher grade core and
assess the potential for large scale underground bulk mining that
could be milled at the existing Kemess facilities.
During the third quarter, two drills completed a
total of 11,200 m in 20 holes and the entire Kemess
Underground diamond drill program (26 holes totalling 16,150 m) is
now complete. A press release dated September 15, 2010 reported on
the assay results of the first 11 holes, the highlights of which
included a number of holes that contained gold and copper bearing
intervals that were among the highest in grade thickness ever
drilled at Kemess. A comparison to the 2005 block model also
indicated that the gold and copper intervals for these 11 holes are
20% and 22% higher for gold and copper respectively. This
difference was attributed to the fact that the 2005 resource model
was based on interpolation from wider spaced drilling that was
unconstrained with respect to important grade domains existing
within the resource. The net effect was to over-estimate low grade
regions and to under-estimate high grade regions.
The assays for the remaining 15 holes will be
reported when they have been compiled and processed, which is
anticipated by early December. We will then incorporate the results
into a new underground resource estimate to be completed in early
2011.
Fosterville Gold Mine
The focus of this year's exploration program at
Fosterville has been on reserve and resource expansion.
Drilling within the Phoenix Footwall and Phoenix Extension down dip
from the existing reserves has been testing for the large scale
continuity of the Phoenix Deposit, which has been the most
productive orebody identified on the property to date. Three holes
have been drilled totalling 1,590 m using underground drill
platforms and while still in early stages of the program, drill
results have been excellent: hole UDE038 in the Footwall
intersected 5.4 g/t gold over 24.9 m, including 11.5 g/t gold
over 5.6 m and 10.1 g/t gold over 4.3 m and hole UDE-037 in the
Phoenix Extension intersected 14.1 g/t gold over 4.7 m (see
exploration press release dated November 10, 2010 for complete
drill results and update on exploration activities within the lower
Phoenix resource block).
Figure 2: Longitudinal Section of the Fosterville Gold
Mine
www.northgateminerals.com/Theme/Northgate/files/Releases/Q310Fig2.gif
Other exploration drilling continued during the
quarter with four drill rigs completing approximately
15,115 m. Within the mining lease, the focus was on resource
to reserve conversion on three target areas: Harrier Underground
North and the Vulture and Kite resource areas that are accessible
from the Harrier Decline. Exploration targets on lease included the
Phoenix Deeps (section 6050N) and an East-West traverse across the
O'Donnell's Reef structure. On the regional tenements, four holes
were drilled in the Goornong South area to the north of the Mining
Lease.
Sufficient drilling was completed on the Harrier
Underground North, the Vulture and the Kite areas that resource
estimation has been initiated and it is anticipated that these
areas will be included in the year end statement of resources and
reserves.
Drilling on section 6050N exploring for an
extension of the main Phoenix deposit is ongoing with one parent
hole and two daughter holes completed during the quarter. The
parent and the first daughter hole have intersected low grade
mineralization over a broad zone at the targeted structural
setting. Drilling of additional daughter holes is ongoing.
The East-West traverse across O'Donnell's Reef,
targeted the source of the initial discovery in the Fosterville
district on which several historic shafts were sunk, as well as
testing a coincident geophysical anomaly (IP chargeability) and a
geophysically inferred structure similar in nature to the main
Fosterville Fault. Results to date include two to three metre
thick intersections of one to three g/t gold indicating that the
mineralizing system was active in this area, albeit sub-grade
ore.
Goornong South is an area of historic drilling
with intersections of interest such as 8.0 m of 7.1 g/t gold
and 2.0 m of 29.4 g/t (near to true thickness). Regional
geophysical surveys carried out in 2010 suggested that these
intersections were along a structure similar in nature to the
Fosterville Fault and O'Donnell's Reef, so broad spaced drilling
was initiated with four holes drilled during the quarter. Results
to date have included intersections of 4.5 g/t over 5.1 m and
5.2 g/t over 2.9 m.
Stawell Gold Mine
During the quarter, the exploration program at
Stawell discovered gold in two previously untested areas, the first
being the previously-announced Northgate Gift and the second being
an area 1.6 km south of existing mine workings.
The Northgate Gift is the fault offset
extension, below and northeast of the Golden Gift and Magdala
orebodies, which have produced over two million ounces of gold on
the property in the past 26 years. Discovery hole MD5696A
reached its target and intersected gold-bearing intervals of 4.53
g/t over 1.8 m and 3.83 g/t over 3.6 m (see press release dated
August 31, 2010). The discovery of a basalt dome and
associated gold mineralization in the Northgate Gift confirms the
validity of Northgate's geologic model of Stawell, which was used
to target hole MD5696A. Follow-up drilling is planned to better
define the size and geometry of the basalt dome and the associated
gold-bearing sulphide mineralization.
Northgate also discovered a second area of gold
mineralization, 1.6 km south of existing mine workings, when hole
SD649A intersected 13.7 g/t over 5.45 m, including 25.0 g/t
over 2.2 m, and 15.4 g/t over 2.5 m. This discovery is a
geophysically inferred basalt dome similar in nature to the basalt
domes found within the Stawell Golden Gift orebody. Follow-up
drilling is planned over the next three quarters in an effort to
outline a broad zone of mineralization that would be readily
accessible from existing mine workings.
Also during the quarter, drilling took place
within GG6L where there is potential to add to high-grade reserves.
Currently, production is taking place in the GG6 zone, where the
average reserve grade is 6.3 g/t gold. Highlights from the
GG6L drill program are included below. For complete drill
results and update on exploration activities within GG6L, please
see exploration press release dated November 10, 2010.
Basalt Contact:
- Hole MD-5338 returned 13.2 g/t over 4 m.
- Hole MD-5281 contained several excellent intervals: 4.9 g/t
over 16.4 m, including 7.1 g/t over 7.6 m and
15.9 g/t over 5.1 m.
- Hole MD-5790 also contained several excellent intervals: 5.7
g/t over 5.2 m, including 13.0 g/t over 1.5 m; a second
interval returned 5.8 g/t over 9.7 m, including 8.0 g/t over
3.0 m and 13.2 g/t over 1.5 m.
Waterloo:
- Hole MD-5281 returned 24.0 g/t over 10.6 m.
- Hole MD-5481 returned 21.0 g/t gold over 3.1 m.
Other exploration during the quarter included
off lease targets within the district, which are undergoing
preliminary evaluation with geophysical and geochemical surveys in
preparation for drill testing later in the year or early 2011.
Summarized Consolidated Results
(Thousands of US dollars, except where noted) |
Q3
2010 |
Q3
2009 |
YTD
2010 |
YTD
2009 |
Financial Data |
|
|
|
|
Revenue |
$ 88,331 |
$ 120,163 |
$ 336,346 |
$ 374,278 |
Net earnings (loss) |
(8,881) |
(8,563) |
316 |
18,249 |
|
Per share (diluted) |
(0.03) |
(0.03) |
0.00 |
0.07 |
Adjusted net earnings
1 |
1,732 |
7,660 |
1,953 |
45,030 |
|
Per share (diluted) |
0.01 |
0.03 |
0.01 |
0.18 |
Cash flow from
operations |
13,477 |
50,452 |
40,704 |
145,651 |
Cash and cash
equivalents |
168,174 |
235,929 |
168,174 |
235,929 |
Total assets |
$ 748,033 |
$ 787,940 |
$ 748,033 |
$ 787,940 |
Operating Data |
|
|
|
|
Gold production
(ounces) |
|
|
|
|
|
Fosterville |
22,436 |
25,550 |
77,333 |
76,745 |
|
Stawell |
16,530 |
20,319 |
53,600 |
62,777 |
|
Kemess |
26,033 |
34,922 |
75,703 |
142,123 |
|
Total gold
production |
64,999 |
80,791 |
206,636 |
281,645 |
Gold sales
(ounces) |
|
|
|
|
|
Fosterville |
23,021 |
27,114 |
78,117 |
78,352 |
|
Stawell |
15,991 |
20,172 |
53,346 |
64,415 |
|
Kemess |
19,071 |
38,111 |
67,691 |
149,886 |
|
Total gold sales |
58,083 |
85,397 |
199,154 |
292,653 |
Realized gold price
($/ounce) 2 |
1,234 |
982 |
1,207 |
944 |
Net cash cost ($/ounce)
3 |
|
|
|
|
|
Fosterville |
774 |
612 |
703 |
526 |
|
Stawell |
939 |
694 |
915 |
573 |
|
Kemess |
347 |
395 |
447 |
373 |
Average net cash cost
($/ounce) |
645 |
539 |
664 |
459 |
Copper production
(thousands pounds) |
10,869 |
11,934 |
30,041 |
40,746 |
Copper sales (thousands
pounds) |
7,434 |
12,816 |
26,576 |
40,795 |
Realized copper price ($/pound) 2 |
3.96 |
3.39 |
3.30 |
2.70 |
- Adjusted net earnings is a non-GAAP measure. See section
entitled "Non-GAAP Measures" in the Corporation's interim quarter
MD&A Report.
- Metal pricing quotational period for Kemess is three
months after the month of arrival ("MAMA") at the receiving
facility for copper and one MAMA for gold. Therefore, realized
prices reported will differ from the average quarterly reference
prices, since realized price calculations incorporate the actual
settlement price for prior period sales, as well as the forward
price profiles of both metals for unpriced sales at the end of the
quarter.
- Net cash cost per ounce of production is a non-GAAP
measure. See section entitled "Non-GAAP Measures" in the
Corporation's interim MD&A Report.
Interim Consolidated Balance Sheets
Thousands
of US dollars |
September
30 2010 |
December
31 2009 |
|
(Unaudited) |
Assets
|
Current Assets |
Cash and cash equivalents |
$ 168,174 |
$ 253,544 |
Trade and other receivables |
44,314 |
27,961 |
Income taxes receivable |
5,724 |
— |
Inventories (note 3) |
51,220 |
44,599 |
Prepaid expenses |
1,488 |
2,566 |
Future
income tax asset |
5,969 |
5,541 |
|
276,889 |
334,211 |
Other assets |
38,157 |
27,544 |
Deferred transaction costs (note
4) |
898 |
— |
Future income tax asset |
6,418 |
14,507 |
Mineral property, plant and
equipment |
388,536 |
327,416 |
Investments
(note 5) |
37,135 |
38,001 |
|
$
748,033 |
$
741,679 |
Liabilities and
Shareholders' Equity |
Current Liabilities |
Accounts payable and accrued
liabilities |
$ 82,551 |
$ 59,132 |
Income taxes payable |
— |
29,395 |
Short-term loan (note 6) |
40,467 |
41,515 |
Capital lease obligations |
8,294 |
5,995 |
Provision for site closure and
reclamation obligations |
17,239 |
23,501 |
Future
income tax liability |
881 |
867 |
|
149,432 |
160,405 |
Capital lease obligations |
10,487 |
4,656 |
Other long-term liabilities |
2,588 |
8,995 |
Provision for site closure and
reclamation obligations |
18,600 |
23,989 |
Future
income tax liability |
425 |
— |
|
181,532 |
198,045 |
Shareholders' Equity |
Common shares |
403,867 |
402,879 |
Contributed surplus |
8,311 |
6,202 |
Accumulated other comprehensive
income (loss) |
15,749 |
(3,705) |
Retained
earnings |
138,574 |
138,258 |
|
566,501 |
543,634 |
|
$
748,033 |
$
741,679 |
Commitments (note 12)
Subsequent event (note 13)
The accompanying notes form an integral part of these unaudited
interim consolidated financial statements.
|
Interim Consolidated
Statements of Operations and Comprehensive Income
|
|
Thousands of US dollars, |
Three Months Ended Sept
30 |
|
Nine Months
Ended Sep 30 |
|
except share
and per share amounts, unaudited |
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
|
|
|
Revenue |
|
$ 88,331 |
|
$ 120,163 |
|
$ 336,346 |
|
$ 374,278 |
|
|
|
|
|
|
Cost of sales (note 3) |
65,836 |
|
81,959 |
|
227,172 |
|
228,011 |
|
Depreciation and depletion |
26,474 |
|
27,804 |
|
78,452 |
|
77,393 |
|
Administrative and general |
2,566 |
|
2,424 |
|
9,056 |
|
7,062 |
|
Net interest income |
(698) |
|
(112) |
|
(1,614) |
|
(1,022) |
|
Exploration |
7,284 |
|
3,132 |
|
17,930 |
|
11,872 |
|
Currency translation loss (gain) |
(4,560) |
|
1,262 |
|
(1,819) |
|
4,638 |
|
Accretion of site closure and
reclamation obligations |
414 |
|
802 |
|
1,244 |
|
2,301 |
|
Write-down of investments (note
5) |
5 |
|
10,440 |
|
374 |
|
10,948 |
|
Other income
(note 10) |
(174) |
|
(125) |
|
(1,495) |
|
(953) |
|
|
|
|
|
|
|
|
|
97,147 |
|
127,586 |
|
329,300 |
|
340,250 |
|
|
|
|
|
|
Earnings (loss) before income
taxes |
(8,816) |
|
(7,423) |
|
7,046 |
|
34,028 |
|
Income tax recovery (expense) |
|
|
|
|
|
|
|
|
|
Current |
|
(461) |
|
(5,333) |
|
2,371 |
|
(30,453) |
|
|
Future |
|
396 |
|
4,193 |
|
(9,101) |
|
14,674 |
|
|
|
|
|
|
|
|
|
(65) |
|
(1,140) |
|
(6,730) |
|
(15,779) |
|
|
|
|
|
|
Net earnings (loss) for the
period |
(8,881) |
|
(8,563) |
|
316 |
|
18,249 |
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on available
for sale investments |
87 |
|
(3,622) |
|
(849) |
|
(3,308) |
|
|
Unrealized gain on translation of
self-sustaining operations |
36,282 |
|
29,527 |
|
19,697 |
|
70,582 |
|
|
Reclassification of other than
temporary loss on available for sale investments to net
earnings |
5 |
|
10,440 |
|
374 |
|
10,948 |
|
|
Reclassification of realized loss (gain) on available for sale
investments to net earnings |
(26) |
|
— |
|
232 |
|
— |
|
|
|
|
|
|
|
|
|
36,348 |
|
36,345 |
|
19,454 |
|
78,222 |
|
|
|
|
|
|
Comprehensive income |
$ 27,467 |
|
$ 27,782 |
|
$ 19,770 |
|
$ 96,471 |
|
|
|
|
|
|
Net earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
|
$
(0.03) |
|
$
(0.03) |
|
$
0.00 |
|
$
0.07 |
|
|
Diluted |
|
$
(0.03) |
|
$
(0.03) |
|
$
0.00 |
|
$
0.07 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
290,957,352 |
|
256,014,978 |
|
290,846,108 |
|
255,876,448 |
|
|
Diluted |
|
290,957,352 |
|
256,014,978 |
|
292,160,978 |
|
256,390,058 |
The accompanying notes form an integral part of these interim
consolidated financial statements.
Interim Consolidated Statements of
Cash Flows
|
|
|
|
|
|
|
|
Three Months Ended Sep
30 |
|
Nine Months Ended Sep
30 |
Thousands of US dollars,
unaudited |
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
|
|
|
Net earnings (loss) for the period |
$
(8,881) |
|
$
(8,563) |
|
$
316 |
|
$
18,249 |
Non-cash items: |
|
|
|
|
|
|
|
|
Depreciation and depletion |
26,474 |
|
27,804 |
|
78,452 |
|
77,393 |
|
Unrealized currency translation loss |
89 |
|
3,828 |
|
414 |
|
3,819 |
|
Accretion of site closure and reclamation
obligations |
414 |
|
802 |
|
1,244 |
|
2,301 |
|
Loss (gain) on disposal of assets |
(29) |
|
93 |
|
(1,334) |
|
276 |
|
Amortization of deferred charges |
— |
|
89 |
|
— |
|
196 |
|
Stock-based compensation |
489 |
|
352 |
|
2,439 |
|
1,106 |
|
Accrual of employee severance costs |
520 |
|
197 |
|
1,393 |
|
1,527 |
|
Future income tax expense (recovery) |
(396) |
|
(4,193) |
|
9,101 |
|
(14,674) |
|
Change in fair value of forward contracts |
14,837 |
|
8,262 |
|
1,766 |
|
22,619 |
|
Write-down of investments |
5 |
|
10,440 |
|
374 |
|
10,948 |
|
Loss (gain) on sale of investments |
(26) |
|
— |
|
232 |
|
— |
Changes in operating
working capital and other (note 11) |
(20,019) |
|
11,341 |
|
(53,693) |
|
21,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
13,477 |
|
50,452 |
|
40,704 |
|
145,651 |
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Increase in restricted cash |
(11) |
|
(302) |
|
(9,890) |
|
(438) |
|
Purchase of plant and equipment |
(10,389) |
|
(7,945) |
|
(32,549) |
|
(26,833) |
|
Mineral property development |
(37,014) |
|
(15,047) |
|
(78,791) |
|
(32,667) |
|
Transaction costs paid |
(738) |
|
— |
|
(898) |
|
— |
|
Proceeds from sale of equipment |
— |
|
21 |
|
513 |
|
331 |
|
Proceeds from insurable asset disposition |
— |
|
— |
|
1,619 |
|
— |
|
Proceeds from sale of
investments |
|
37 |
|
— |
|
119 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
(48,115) |
|
(23,273) |
|
(119,877) |
|
(59,607) |
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Repayment of capital lease obligations |
(2,070) |
|
(1,145) |
|
(5,436) |
|
(3,804) |
|
Repayment of short-term loan |
(320) |
|
(329) |
|
(1,048) |
|
(1,269) |
|
Repayment of other long-term liabilities |
(217) |
|
(4) |
|
(646) |
|
(328) |
|
Issuance of common
shares |
249 |
|
88,525 |
|
658 |
|
88,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,358) |
|
87,047 |
|
(6,472) |
|
83,400 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
997 |
|
944 |
|
275 |
|
4,066 |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents |
(35,999) |
|
115,170 |
|
(85,370) |
|
173,510 |
Cash and cash
equivalents, beginning of period |
204,173 |
|
120,759 |
|
253,544 |
|
62,419 |
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
$ 168,174 |
|
$ 235,929 |
|
$ 168,174 |
|
$ 235,929 |
Supplementary cash flow information (note 11)
The accompanying notes form an integral part of these interim
consolidated financial statements.
* * * * * * *
This press release should be read in conjunction
with the Corporation's third quarter MD&A report and
accompanying unaudited interim consolidated financial statements,
which can be found on Northgate's website at
www.northgateminerals.com, in the "Investor Info" section, under
"Financial Reports".
* * * * * * *
Q3 2010 Third Quarter Results Conference Call and
Webcast
Northgate will be hosting a live conference call
and webcast discussing our third quarter financial results on
November 10, 2010 at 10:00 am Toronto time. You may
participate in our conference call by calling 647-427-7450
or toll free in North America at 1-888-231-8191. To ensure
your participation, please call five minutes prior to the scheduled
start of the call.
A live audio webcast and presentation package
will be available on Northgate's homepage at
www.northgateminerals.com. Information pertaining to the conference
replay, available from Nov. 10 to Nov. 17, can also be found on our
website.
* * * * * * *
Northgate Minerals Corporation is a gold
and copper producer with mining operations, development projects
and exploration properties in Canada and Australia. Our
vision is to be the leading intermediate gold producer by
identifying, acquiring, developing and operating profitable,
long-life mining properties.
* * * * * * *
Qualified Person
The program design, implementation, quality assurance/quality
control and interpretation of the results are under the control of
Northgate's geological staff, which includes a number of
individuals who are qualified persons as defined under NI 43-101.
Carl Edmunds, PGeo, Northgate's Exploration Manager, has reviewed
the geologic content of this release.
Cautionary Note Regarding Forward-Looking Statements and
Information:
This Northgate press release contains "forward-looking
information", as such term is defined in applicable Canadian
securities legislation and "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995, concerning Northgate's future financial or operating
performance and other statements that express management's
expectations or estimates of future developments, circumstances or
results. Generally, forward-looking information can be identified
by the use of forward-looking terminology such as "expects",
"believes", "anticipates", "budget", "scheduled", "estimates",
"forecasts", "intends", "plans" and variations of such words and
phrases, or by statements that certain actions, events or results
"may", "will", "could", "would" or "might" "be taken", "occur" or
"be achieved". Forward-looking information is based on a number of
assumptions and estimates that, while considered reasonable by
management based on the business and markets in which Northgate
operates, are inherently subject to significant operational,
economic and competitive uncertainties and contingencies. Northgate
cautions that forward-looking information involves known and
unknown risks, uncertainties and other factors that may cause
Northgate's actual results, performance or achievements to be
materially different from those expressed or implied by such
information, including, but not limited to gold and copper price
volatility; fluctuations in foreign exchange rates and interest
rates; the impact of any hedging activities; discrepancies between
actual and estimated production, between actual and estimated
reserves and resources or between actual and estimated
metallurgical recoveries; costs of production; capital expenditure
requirements; the costs and timing of construction and development
of new deposits; and the success of exploration and permitting
activities. In addition, the factors described or referred to in
the section entitled "Risk Factors" in Northgate's Annual
Information Form for the year ended December 31, 2009 or under the
heading "Risks and Uncertainties" in Northgate's 2009 Annual
Report, both of which are available on the SEDAR website at
www.sedar.com, should be reviewed in conjunction with the
information found in this press release. Although Northgate has
attempted to identify important factors that could cause actual
results, performance or achievements to differ materially from
those contained in forward-looking information, there can be other
factors that cause results, performance or achievements not to be
as anticipated, estimated or intended. There can be no assurance
that such information will prove to be accurate or that
management's expectations or estimates of future developments,
circumstances or results will materialize. Accordingly, readers
should not place undue reliance on forward-looking information. The
forward-looking information in this press release is made as of the
date of this press release, and Northgate disclaims any intention
or obligation to update or revise such information, except as
required by applicable law.
Cautionary Note to US Investors Regarding Mineral Reporting
Standards:
The Company prepares its disclosure in accordance with the
requirements of securities laws in effect in Canada, which differ
from the requirements of U.S. securities laws. Terms relating to
mineral resources in this press release are defined in accordance
with National Instrument 43-101-Standards of Disclosure for Mineral
Projects under the guidelines set out in the Canadian Institute of
Mining, Metallurgy, and Petroleum Standards on Mineral Resources
and Mineral Reserves. The Securities and Exchange Commission (the
"SEC") permits mining companies, in their filings with the SEC, to
disclose only those mineral deposits that a company can
economically and legally extract or produce. The Company uses
certain terms, such as, "measured mineral resources" "indicated
mineral resources", "inferred mineral resources" and "probable
mineral reserves", that the SEC does not recognize (these terms may
be used in this press release and are included in the Company's
public filings which have been filed with securities commissions or
similar authorities in Canada).
SOURCE Northgate Minerals Corporation
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